Nuog24 May 2018 08:59
Completing a 3D seismic survey (the "Seismic") covering a minimum of the area of PL2002-01(A) in return for a 21% interest in the lease. The Seismic, which is expected to cost in excess of C$5million, will be funded 100% by PVF.
� Following the completion of the Seismic PVF will fund a new well into PL2002-01(A) (the "Farm-In Well") in return for a further 49% interest in the lease. PVF will fund 100% of the cost of the Farm-In Well, anticipated to be in excess of C$12million. The location of the Farm-In Well will be determined by agreement between Enegi and PVF.
The final costs incurred by PVF to undertake the work programme as set out above, if different from the expected costs, will not affect the interest earned by PVF.
The Company anticipates that a new well will target areas of hydrothermal dolomite down-dip from the current PAP#1-ST#3 well, which demonstrate enhanced connectivity and porosity and are therefore believed to be able to deliver higher flow rates. Increasing production rates will significantly increase the total volume of oil that can be commercially recovered from Garden Hill and, as a result, drilling the proposed well will improve the economic return from the lease.
In return for funding 100% of the costs, PVF will also earn interest in the site infrastructure in line with their interest in the lease. Nu-Oil and PVF will be liable for abandonment obligations in proportion to their lease interests. Enegi Oil Inc. will remain as operator of the Lease until completion of both stages of the farm-in.